Gregory J. Heym
Executive Vice President, Chief Economist
Drop in residential transactions as buyers grow more cautious
By Lauren Elkies
With the traditionally sluggish summer season upon us, the advent of the credit crisis not too far behind and inventory piling up, real estate brokers are bracing themselves for what could be a particularly slow few months.
The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April, according to the most recent research from appraisal company Miller Samuel. From February to March the increase was 4.8 percent, Miller Samuel data indicate.
"Inventory levels are rising primarily as a result of lower sales activity," said Jonathan Miller, president and CEO of Miller Samuel.
Buyers are weighing options more carefully, sellers have not been eager to slash prices, and there appears to be no reason for that to change now.
"Buyers are taking much longer to make their decisions, and there is a large amount of insecurity and concern today [due to the] recession, economic slowdown and job security," said John Harhay, a vice president and sales manager at Manhattan Apartments.
"Many properties are still being priced too high," said David Cooper, a vice president on the Jacky Teplitzky team at Prudential Douglas Elliman. "Most sellers believe their properties are actually worth more than they really are."
While prices may be going down, a surge in closings at the Plaza Hotel and 15 Central Park West in April drove the median price up, according to data from Terra Holdings, parent company of Brown Harris Stevens and Halstead Property. There was "a significant pickup in closings at the Plaza and 15 CPW, 48 in April compared to 26 in March," said Gregory Heym, executive vice president and chief economist at Terra. The median sales price ticked up 5 percent to $945,000 in April from $900,000 in March, the data show.
The rental market does not look like it will reach eyebrow-raising prices after a period of units languishing on the market and rents staying flat or dropping.
"There is still way too much inventory for rent in Manhattan, and some owners who are not really in tune with the market are still pushing their rents. They think there are more people out there looking than there actually are," said Marc Lewis, COO of Century 21 NY Metro.
Sunday, June 01, 2008